SOURCE: Burst.com, Inc.

May 26, 2005 06:00 ET

Burst.com Adds New Board Member

CEO and VP of Operations Sign 3-Year Employment Contracts

New U.S. Patent Grant Announced

SANTA ROSA, CA -- (MARKET WIRE) -- May 26, 2005 -- Burst.com, Inc. (OTC: BRST), a provider of patented media delivery software and intellectual property, today announced that at the request of the Company's Board of Directors, long-time Burst.com investor and cable industry pioneer Gordon Rock has joined the Company's Board of Directors. Rock joins current outside Board members Barry Ritholtz and Brian Murphy, as well as Chairman & CEO Richard Lang, increasing the Board's size to 4 individuals.

Rock has been an investor in each of the Company's financings since making his original investment in 1992. He was also the Company's only secured creditor until his debt was retired in April of this year, following the successful licensing of Burst's patent portfolio to Microsoft Corporation in March for $60 million. Rock has an entrepreneurial communications background in cable television, cellular and satellite distribution. He has also advised and invested in several early stage and turnaround companies

According to Lang, "Gordon Rock has been in the Company's corner since 1992, and has provided invaluable and unwavering assistance at multiple junctures over the years. We are extremely pleased and honored that Mr. Rock has now officially joined our team as a Board member and we look forward to his valuable experience and contributions going forward." Lang also announced that Eric Walters, the Company's Vice President of Operations, was appointed as the Company's Secretary.

The company also announced that as of May 17, 2005, its CEO Richard Lang and its Vice President of Operations Eric Walters have both signed new 3-year employment agreements with the company. As part of his agreement, Mr. Lang was granted an option to purchase 1,250,000 shares of the company's common stock at an exercise price of $.50 per share. Mr. Walters was granted an option to purchase 250,000 shares, also at an exercise price of $.50 per share. Options for both executives vested immediately and both have exercised their options in their entirety with 4-year non-recourse Promissory Notes with the company. The Board also extended existing non-recourse promissory notes for both executives until May 2009 and added a provision providing for forgiveness of the notes, at the election of the executives, under several circumstances, including the termination of either executive without cause or acquisition of the company or substantially all of its assets by a person or entity not currently in control of the company. Salary levels for both executives remained at current levels.

According to Burst Director Barry Ritholtz, "We are very pleased to announce that Mr. Lang and Mr. Walters have signed on to continue in their leadership of the company at this important juncture. Over the past 15 years, they have proven themselves to be tirelessly dedicated individuals with the interest of the shareholders always in the forefront. As pioneers in the industry whose foresight and persistence has already been validated by Burst's success thus far, they are poised to lead Burst into the next exciting phase of our company's development. As outside Board members, we are thrilled to see these employment agreements put into place." According to Ritholtz, both executives' employment agreements contain separate Intellectual Property Agreements that assign innovations by either individual during the course of their employment to Burst. Mr. Lang and Mr. Walters are both currently the inventors-of-record for most of the company's issued and pending patents around the world.

Mr. Ritholtz is chief market strategist for the Maxim Group in New York. He is a frequent guest on CNBC, Fox and other business news outlets, as well as a contributor to TheStreet.com. On May 18th, he and Mr. Brian Murphy, a member of Burst's Board of Directors since 1994, each received a 3-year option to purchase 200,000 shares of the company's common stock at an exercise price of $.50 per share. Also, in conjunction with his new appointment as a Board member on May 24th, Mr. Gordon Rock was granted a 3-year option to purchase 50,000 shares of the Company's common stock at a price of $.54 per share. Options for all 3 board members vested immediately. The company's Office Manager was granted an option to purchase 50,000 shares of the company's common stock at an exercise price of $.50 per share, which vested immediately, and which he has exercised with a 4-year non-recourse note with the Company.

According to Lang, "We are very fortunate to have a Board of Directors that has taken a thoughtful, meaningful and active role in the affairs of the Company. Over the course of many years and multiple challenges along the way, they continue to serve without any cash compensation, so we are pleased to be able to provide them with the incentive to continue in their important and valuable ongoing contributions to the company."

The Company also announced that is has been granted a new patent from the U.S. Patent and Trademark Office. U.S. patent # 6,850,965, entitled "Method For Connection And Rapid Determination Of Optimal Multi-Media Content Delivery Over Network," is authored by the Company's former Chief Scientist, Arthur Allen. According to Lang, Burst's newest patent brings Mathematical Optimization Theory to bear on the problems associated with multi-media network delivery.

"Many in the industry have mistakenly assumed that cheap storage and lots of bandwidth alone will provide the quality of service required for commercially viable video-on-demand, somehow solving all media delivery problems in one step; no less important is the ability to effectively manage and fully utilize aggregate network and server capacity. Accordingly, our newest patent describes an approach which combines dynamic 'burst' media delivery with the rigor and proven effectiveness of mathematical optimization. We believe that as the industry continues to develop, the value of this intellectual property will become increasingly apparent, and we look forward to successfully incorporating it into our licensing programs," Lang noted. For further details, the technical reader is referred to http://portal.acm.org/citation.cfm?id=500155&coll=ACM&dl=ACM&CFID=45887.

About Burst.com:

Burst.com, headquartered in Santa Rosa, California, is the developer of Faster-Than-Real-Time™ and Burst-Enabled™ video and audio delivery software. Burst.com's Burstware® provides high-quality delivery of full-motion video and CD-quality audio over IP-based networks. The company, established in 1990, has built an international patent portfolio covering bursting, video delivery scheduling and Rapid-casting. Burstware®, Faster-Than-Real-Time™ and Burst-Enabled™ are trademarks of Burst.com. More information about Burst.com is available at www.burst.com.

Contact Information

  • For Further Information Contact:
    Richard Lang
    707-541-3870